Moving Up to a Townhouse in the West Loop: 1137 W. Monroe
If you want more space but want to stay in the West Loop neighborhood, a townhouse is usually the property of choice for most move up buyers.
This townhouse in the Chelsea Townhomes development, at 1137 W. Monroe was built by Belgravia in 2006.
It has 3 bedrooms, as well as 3 outdoor spaces, and a West Loop location near the shops and restaurants on Madison.
The townhouse is also listed below the 2007 purchase price and is the cheapest townhouse listed for sale in the development.
Renee Yuditsky at Rubloff has the listing. See the virtual tour here.
See the property’s website here.
Or go see the property at the open house, Sunday June 21: 12-2 pm.
Unit #8: 3 bedrooms, 2.5 baths, no square footage listed, 2 car garage
- Sold in September 2006 for $565,000
- Sold in May 2007 for $627,500
- Originally listed in April 2009 for $649,500
- Reduced several times
- Currently listed at $615,000
- Assessments of $205 a month
- Taxes of $7873
- Central Air
- Bedroom #1: 15×15
- Bedroom #2: 13×12
- Bedroom #3: 13×12
- Family room: 17×12
Looks like these buyers want to do a little ‘moving up’ of their own given the telltale sign of a baby crib in the 3rd bedroom….too bad the ‘moving up’ market is all but dead:
From Reuters: Housing Sales Lackluster This Spring: Coldwell
Jim Gillespie, president and chief executive of Coldwell Banker Real Estate, in an interview with Reuters, said sales were only modest during the spring, with demand overwhelmingly dominated by first-time home buyers and investors.
“The more important ‘move-up’ buyers were absent and that is not encouraging,” said Gillespie …”They are key to a U.S. housing market recovery,”
90% financing in 2007 ($502 + $62); amazing. They did everything right and they’re still going to lose money 😉 everything right except buy from a passive flipper at the height of the bubble…
I will never understand the mentality of someone who spends $630k for a place before starting a family. It shows one of two things: complete lack of planning wrt to life events or real estate speculation. In any case neither warrant much sympathy.
That being said this is a nice place and I really like the finishes.
Given the location they might come out of this with nary a nick. I guess it sells at or near ask.
I predict that until people start losing a lot of money from needing to sell, the tales won’t circulate that RE doesn’t always go up and the paradigm won’t change. If this sells near ask (and it might) someone like here losing only 15k isn’t going to have many sob stories about that rather small loss.
“Bob on June 19th, 2009 at 10:22 am
I will never understand the mentality of someone who spends $630k for a place before starting a family.”
1. They earn 150k+ year
2. Trust Fund
3. Wealthy Parents
etc.
Not everybody is a low wage earner like you Bob.
To everyone out there that claims the bubble in chicago was not nearly as big as in other markets…
I guess it’s all relative, but giving a flipper an 11% gain in 8 months is completely insane. Despite their initial 10% “equity” in this deal, they are now massively under water. Good luck to them.
“They earn 150k+ year”
Actually, people that earn 150,000 probably can’t afford a 630,000 place, despite what Suzanne researched.
They’ve paid ~$2750 per month in I+T+A for the two years they owned it (assuming 5% interest on the loan).
What would one of these (or somthing similar) rent for? A 4/4.5 in the same development is on Craigs right now for $3750. Seems like, if they can sell for close to their current ask, they really won’t be too far off rental breakeven, except for the realtor commission (and ignoring the fact that, had they rented, they likely would have rented something a bit cheaper).
MJ, if you have the 20% down that you need in this market to get decent terms anyway you can easily afford a $630k place on $150k.
“Not everybody is a low wage earner like you Bob.”
Tsk, tsk, Dee. If you’re “in” the RE industry I’d venture to guess my wages are higher than yours these days.
Sure there are standout stars in the industry, but most are starving these days, aren’t they Dee? 😉
The crib in the bedroom…
They probably just got around to looking at the West Loop schools…
We love living in the West Loop now, but we are renting here on purpose. When our little one gets old enough, we are bolting for the Ogden or Lincoln district so we have a backup in case private or magnet schooling doesn’t work out.
“giving a flipper an 11% gain in 8 months is completely insane”
Well, not that it is non-insane, but the flipper’s closing price was probably a pre-construction price from 10-24 months earlier than their closing date. So it likely was 11% for ~2 years, rather than for 8 months.
Keep in mind that flippers were essentially (extremely) limited partners with the developers–they signed contracts and made deposits that allowed the developer to get financing on favorable terms. Their return was premised on the developer raising the asking price on any units not sold to pre-con buyers.
“if you have the 20% down that you need in this market to get decent terms anyway you can easily afford a $630k place on $150k.”
.8*$630 = $504k.
Where’s this jumbo financing for 6.25%* coming from? Or do you know a bank offering 2d mortgages?
*(150k*.28 – taxes – assessments / 504 = ~6.25%).
^^^
anon(tfo) thats too many numbers. I like Dee’s fuzzy math better where people from money want to live in the West Loop (specifically) and 150k income families can afford 630k places.
How are those trust funders holding up, Dee? Apparently they’re not fans of some of the new construction condos like Emerald, Pure, R+D659, etc. are they?
Afterall a 630k place is only 4.2x their annual income, totally reasonable, right? Lets get out that GAP card and splurge this weekend!
I’d bet both mortgages are IO.
The thing is Dee that these sellers probably USED to earn $150k, sort of a fluke you know, and they bought the most expensive place they could afford at the height of their own little income bubble, and now that the job in (sales) or whatever now they trying to live off significantly less, and mommy probably wants to stay at home to raise the baby (maybe #2 is on the way?); they can rent more space for less money elsewhere in the city with better school districts…
Well, Bob, I think the less plausible assumption is the 15 months of after-tax income saved.
But, if they had a DP to get a conforming loan, it would certainly work on $150k–$417k at ~6% is totally okay, even with the T & A of this place. The problem is finding someone who makes $150k/yr who has $200k in cash and wants to use it as a DP on this place.
Exactly, it’s like trying to find a needle in a haystack.
“The problem is finding someone who makes $150k yr who has $200k in cash and wants to use it as a DP on this place.”
I’ve seen letters in the last 6 months from Wells for conforming first and then seconds as long as you put at least 20% down when looking at loan values ~$600k.
I think the most interesting thing here is the kid situation. So many of these up and coming (or at least were…) hoods are great for young professionals and DINKs can get particularly good deals. The problem is what you do if you then end up with a kid(s). It seems like everyone then wants to flock right back to LP and LV to get a decent fallback and preference for the elementary magnets.
“Exactly, it’s like trying to find a needle in a haystack.”
It would move quickly at ~$500k, where the buyer can get to a conforming loan with ~$100k. That 2d $100k is the really tough one–if you have that allocated to a house DP, usually you’re looking for more house than this (whether “more” means larger or fancier).
“The problem is finding someone who makes $150k/yr who has $200k in cash and wants to use it as a DP on this place.”
No according to our resident expert Dee, this place is perfect and priced right for:
2. Trust Fund
3. Wealthy Parents
And given how much value Dee adds to this site on a continued basis, I have no basis to discredit her opinions. She is clearly “in the loop” with regard to old monies and knows several people with 200k cash sitting around waiting to put to good use. Don’tcha Dee? 😉
Or more likely after seeing LV and LP prices for SFH they just straight up move to the ‘burbs; As Sabrina says there are some deals out there right now. And did I mention that you don’t have to be politically connected to attend a decent public elementary school? Amazing!
“It seems like everyone then wants to flock right back to LP and LV to get a decent fallback and preference for the elementary magnets.”
“I’ve seen letters in the last 6 months from Wells for conforming first and then seconds”
Huh. Looks like they are still offering I/O, variable rate 2ds, with rates below 5%. Crazy.
Altho, if you want a fixed rate, amortizing 2d, the rate is over 9%. So that’s fun.
“you don’t have to be politically connected to attend a decent public elementary school?”
I’m not politically connected (at all) and my kids will attend a more-than-decent public elementary school. In the City.
Anon(tfo) you also bought your SFH 9 or 10 years before this whole housing mess arose; for the rest of us trying to buy a SFH on the northside with decent schools we’re all screwed.
Aimloan dot com, the wholesale mortgage place I check for rates, recently brought back all kinds of ARMs and IO ARMs at very low rates. They haven’t offered them since they removed them along with no doc loans back last September.
I think until the political will for more regulation gathers they will just keep originating toxic mortgages. If anything any kind of ARM with a 3-3.5% teaser rate is truly toxic.
I don’t understand why people still seem content that interest only mortgages and ARMs continue to exist, it makes no sense to me.
Bob,
In large part I think you are right. IO arms are crazy and really shouldn’t be around with teasers. 5 year ARMs are a bit dicey, but if you are buying your first place there isn’t really anything wrong with getting a 7 year or 10 year ARM (NOT IO, but ‘normal’)because you’ll probably sell and moveup before you hit the 7/10 year reset.
There isn’t any reason that a young professional should buy their first place with a 30 year fixed because they aren’t going to live in that two or three bed condo (in LP/LV/or anywhere) for more than 7 or 10 years. Stay away from the exotics for sure, but 7 and 10 year ARMs aren’t as evil as people make them out to be.
“you also bought your SFH 9 or 10 years before this whole housing mess arose”
I wish. Then I’d have a *lot* more money. Actually 2001, after the whole mess arose.
And there are a LOT more decent (elem.) schools in CPS than there were 8 years ago. And more coming, as people get “stuck” and insist on their neighborhood school not sucking.
“you don’t have to be politically connected to attend a decent public elementary school?”
I thought the magnet lottery was greatly weighted to those within some distance of the school (a mile or something?). Thus what you want is to be located within that distance of as many of the magnet elementaries as possible. Which I’m pretty sure puts you in either prime LP or LV.
“and 10 year ARMs aren’t as evil as people make them out to be.”
Agree with this completely.
kp… what’s wrong with I/O? Keeps someone from taking liquid assets and moving it to non liquid assets. The whole benefit of the loan is the deductibility of interest. The principal pmt is just an asset for asset transfer and liquid is always better than illiquid. Now anything short of a 5 yr arm at low 15 yr rates is basically shorting the 10yr reasonably near the lows.
Yeah that’s what they tell you; don’t you remember the story last year on the suntimes about people cheating the system like crazy to get their kids in? And this being Chicago do you actually believe that your kid has the same chances of attending a magnet as your alderman’s 2nd counsin’s kids? hahahahaa
“I thought the magnet lottery was greatly weighted to those within some distance of the school (a mile or something?). “
“I thought the magnet lottery was greatly weighted to those within some distance of the school”
Conflicting reports on this; I’ve heard no location preference, some location preference, and *large* location preference, which most likely means it varies from school to school.
And the “politics” is almost entirely about the principal at the school, rather than broader Chicago politics.
But, what I was talking about, is attendance area schools that are better-than-decent, of which there are several (by any standard of “decent”) and really a couple dozen or more. Not very many, really, given the 534 elementary schools in CPS, but it’s not as impossible as some make it out. The problem is the pervasive poverty of CPS families–virtually all of the good attendance area Elems have less than 50% low-income families, when the CPS average is 83+%.
What’s wrong with I/O? Let’s see….Mr. and Mrs. Jones want a big fancy house but can’t really afford it with a 30 year fixed, so they get an IO loan instead…now that they can ‘afford’ more house they outbid every other potential buyer who is ‘trapped’ by the monthly payment constraints of a 30 year fixed…..and pretty soon forcing nearly everyone to use IO’s or exotic financing in some form or another on homes in better priced homes.
Ze’s nonsense about asset class transfers is just a red herring, most people use the savings of an IO loan to buy more house not save the money…..it’s the same disingenuous argument that Option ARMs are great for the guy with erratic income who uses his bonuses to pay down principal, when in fact 90% of Option ARM borrowers pay the mimimum each and every month…
anon,
I’d be interested in reading up more about this (not because I expect kids anytime soon but I think it is is an important factor in home value retention that many ignore). Do you have data or rankings online anywhere? Are all of the good attendance area schools just where we would think (i.e. in and around LP)?
The other prob is the neighborhoods with the decent elementary schools (Bell, Edgebrook, etc) are also some of the most expensive neighborhoods for SFH.
HD:
Interest Only and Option ARMs have been around for decades. The problem is that they were pushed on Joe Sixpack instead being reserved for who they were originally designed for. Stated income loans were also available to for self employed borrowers with substantial assets.
All of these products were pushed further down the food chain when Wall Street decided to loosen up credit requirements. The loans are not inherently bad, but were given to a populace that had no business having them in the first place.
There’s nothing inherently bad about heroin either, it’s just a powder derived from a plant, you know, it’s only when people start using it and putting it into the bloodstream that it causes problems. If they would just keep the powder without distributing to the masses then everything would be OK.
ROFLMAO… HD you are throwing out the baby with the bathwater. There is nothing wrong with the I/O loan. The problem is with Mr. and Mrs Jones and lax underwriting standards. (seemingly this problem was with all loan classes – although I will agree an I/O loan should demand a larger down pmt, but I don’t believe ANY loan should be written below 20% down)
If my asset for asset transfer is technically incorrect PLEASE show me how that breaks by accounting standards. What someone does with the remaining assets on their balance sheets and their own personal mismanagement does not make the I/O itself inherently bad. They just shouldn’t be given to people without assets to back it up. But if I have plenty of assets why should I be forced every month to move liquid to illiquid. Please explain, leaving Mr. and Mrs. Jones out and use me as an example. If it’s the I/O itself that is bad then it has to be bad in all circumstances or you are wrong on your causation. Go to it!
Also Ze IO loans remove one of the touted benefits of home ownership. I saw from some realtor commercial that real estate is the largest savings vehicle for most people.
I really believe that IO loans should be banned, or at least restricted to multi-unit properties at a minimum. Theres no reason these should be available to most people.
IO loans only exist to further real estate speculation in the same way that ARM loans only exist to further interest rate speculation. I think we’d be much better off as a society if we completely removed the speculation from the home ownership equation.
Actually heroin is some real evil shit! Pure evil!
Ze,
Maybe for you you see some benefit. From my perspective if you want to keep your net worth liquid you should be renting.
Real estate ownership was never designed as a liquid asset class. Its a very illiquid one with a high utility value.
It seems to me you want your cake and to eat it too.
The problem is its tough to design regulations that exempt people like you vs. the speculating Joe six packs and Jane jaeger bombs.
Bob: IO loans “ONLY” exist
What the hell is with speaking in absolutes. I gave a perfect example of why they exist and why I once had one. Russ is 100% correct. The problem is underwriting standards.
Bob.. to me an asset is an asset.
Basic 101. A liquid asset is always worth more than an illiquid asset, ceteris paribus.
So if I can keep the same balance sheet and keep it more liquid and still own the same assets how am I not more efficient?
“Are all of the good attendance area schools just where we would think (i.e. in and around LP)?”
No. The two “best” (based on test scores) are Oriole Park and Norwood Park on the far NW side. LP has (basically) 3 Elem schools–Lincoln, Alcott and Oscar Meyer. Lincoln has been head and shoulders above the other two.
As to the others, it sort of depends if you think North Center is “around” LP–Bell is great, Coonley should be soon (K-2 already are, the school pop is turning over witha new principal). There are schools I’d (probably–don’t have to actually think about it) send my kids to in LV, BT (one, for now), maybe A’ville, Sauganash.
The CPS website (cps.edu) has tons of info and a GIS attendance boundary map, but not so much with compiled data (imo, b/c the compiled data shows how many schools are tragic). The suntimes has fairly accessible compilations of data.
And bob.. you of all people!!!! I had to read that 3 times, did you just reference a broker argument to define your argument????? I am floored!
Suzanne told me… 🙂
“and still own the same assets how am I not more efficient?”
Maybe its that I can’t wrap my head around owning an asset in the traditional sense. Afterall the mortgage lien against your asset isn’t declining in value and is never retired during the term of the loan so its tough for me to see it as “owning”. It just looks on its face like renting with some tax nuances.
Still yet again it might be okay for you, the problem is the vast majority of time these loans I suspect were used by rehabbers, flippers, and other real estate speculators to buy as much house as possible/leverage up.
“And the “politics” is almost entirely about the principal at the school, rather than broader Chicago politics.”
Completely correct, I know someone who got a kid into a non-local school simply by calling have happening to have the principal pick up the phone and put the kid on the accepted list. No connections, just really good luck and good phone manner.
first “have” should be “and (happening)”…
Bob.. One day if I come back to Chicago I’ll get you some of the stuff I smoke. It will all make sense after that. It will be like awakening from the Matrix 🙂
So what you’re saying is that buyers should qualify based upon a 30 year fixed monthly payment but be allowed to take interest only provided that they save the difference as opposed to using it for a more expensive house? Underwriting standards are just fine; the IO is simply more leverage. If the 30 year fixed is a 3x leverage then Mr. and Mrs. high FICO Jones come along and leverage 3.5x with the interest only loan…it’s not fair for everyone else who wants to play by the rules and eventually everyone has to use the IO loan which is what we see in the jumbo market now where most loans are IO.
The problem with your reasoning is that the IO was designed to assist buyers to BUY MORE HOUSE – not to keep an asset class liquid for the sophisticated investor….that’s merely a unintended result.
“. There is nothing wrong with the I/O loan. The problem is with Mr. and Mrs Jones and lax underwriting standards. “
“Bob.. One day if I come back to Chicago I’ll get you some of the stuff I smoke. It will all make sense after that.”
LOL I dabble a bit myself and I can attest that deflation is very real for my bag, err basket of consumer goods.
“There isn’t any reason that a young professional should buy their first place with a 30 year fixed”
Yes there is…Inflation. FHA is the way to go. Although they cost more, you can get more leverage and they are assumable, which will be very valuable when mortgage rates are in the double digits.
“The problem is its tough to design regulations that exempt people like you vs. the speculating Joe six packs and Jane jaeger bombs.”
Regs:
1) stable(-ish) value of property (i.e., not recently 2x price of 2 years ago, making it more likely that price in 2 years wont be 50% of loan amount, barring demonst)
2) ACTUAL use as residence (primary or not)
3) other assets =/> set % of loan amount
Not so hard. Even if you add a few more, Ze could still use it, but Chad & Trixie Stanleys couldn’t.
Yeah didn’t everybody check the owner-occupied box??? it’s all just paperwork getting in the way of me rehabbin’ and flippin’ this house…..I’ll sign whatever you put in front of my face, just gimme the loan and the keys….
“2) ACTUAL use as residence (primary or not)”
“barring demonst”
…rated improvements, like actual addition of SF to the property, not just new fixtures and paint.
HD. I am not saying anyone need supervise their monthly financing. I agreed it should carry a higher initial down payment to compensate for the risk. This would actually reduce leverage. If I put down a deposit of 25% i am leveraged 4:1 vs the traditional 20% 5:1.
Hell everyone just ripped out their equity with home equity loans anyway so if you don’t like I/O you should view Home Equity loans as Hitler loans. Again I hold to pretty much the whole problem behind the whole housing mess to be underwriting standards. I remember getting my first loan and being amazed I got it. I grew up believing it was a badge of honor to be given a loan.
Bob.. don’t tell that to Shill. He thinks prices are higher so I’m charging him more when he beeps me.
But Ze, all things the same, an IO monthly payment of X will always buy more house than an 30yearfixed monthly payment of X. That means all things being the same the buyer with the IO will always outbid the 30 year fixed buyer. The 30 year fixed buyer is now forced to use the IO just to compete with all the other IO buyers. Hence, we have the jumbo market where pretty much everyone has IO loans to pay for their homes because so few could afford them if they actually had to pay principal.
“Seems like, if they can sell for close to their current ask, they really won’t be too far off rental breakeven, except for the realtor commission”
anon, transaction costs, too, so that is a very big “except.” Another $38,000 approx. IF it closed next month at full price that would be another $1400+ for every month.
I realize the shills have trained many to ignore the costs, but their bank accounts will show them the truth.
HD:
i/o was not designed for buyers to purchase more house – that is a relatively recent phenomenon after u/w standards were loosened. Again, the loans have been around for ages. However, you actually had to be a sophisticated and relatively wealthy buyer to get them. However, as Wall Street got ahead of itself with securitization, the guidelines loosened up and mortgage lenders discovered that people would buy houses like they do cars – payment.
It used to be you were qualified on the full P&I payment, but many banks dropped that guideline during the boom but they have since restored it. Stated income used be for SELF EMPLOYED WITH SUBSTANTIAL ASSETS, yet that also got bastardized to be used with w-2’d employees and 2 mos reserves.
HD.. you just keep messing up causation. Excessive risk taking… Fraud… seperation of risk from consequences. You are right on target with all that and you keep saying the same thing and in the end changing the causation?
It’s like saying speeding while driving drunk is extraordinarily dangerous, outlaw cars!
“Hence, we have the jumbo market where pretty much everyone has IO loans to pay for their homes because so few could afford them if they actually had to pay principal.”
I know *many* people with jumbo loans. I do not know may people with I/O loans (indeed, I’m on my 3d amortizing jumbo mortgage). You (mostly) see the people defaulting, HD. I would expect the vast majority of them to be in the riskier products.
You’re extrapolating from a self-selecting sample w/o adjusting for the obvious selection bias.
And because of this, the IO is inherently bad; just because a sophisticated investor can use it to keep a couple of hundred bucks a month more liquid doesn’t justify the basic mathematical premise and purpose that an IO monthly payment buys more home than a 30 year fixed.
Imagine if all mortgages had to be 15 year fixed, think of what that would do to housing prices! However society has decided that the 30 year fixed is the basis, the benchmark for which all mortgages should arise.
“if you have the 20% down that you need in this market to get decent terms anyway you can easily afford a $630k place on $150k.”
Could you literally afford it on 150K, of course. But this was/is the problem with the whole credit bubble mentality. Nobody ever budgeted anything for savings. Nobody ever thought about what would happen if they lost their job and it took them 8 months to find another job. It’s was always the “buy the biggest house and nicest car that you can. Just make sure you save a couple hundred bucks a month for emergencies. Oh the hell with it, what are credit cards for anyway” mentality.
150K doesn’t actually go that far and if one was financially responsible, they would not be looking at 630K townhomes.
But hey, I’m not a financial planner and I am defintely not Suzanne. So maybe I didn’t “research” this one enough.
HD.. the I/O pmt carries a slightly higher rate which kinda balances it a bit. The first few years principal pmt on a 30 yr is extraordinarily low. You would be surprised how close the 2 look. Russ is right. The I/O was created for qualified buyers who wanted the tax benefits and liquidity. It was the underwriting standards that bastardized it. If you still had to show a strong balance sheet and/or post a higher down pmt there would be no problems. Again … causation!
You too are extrapolating from a self-selecting sample, but the difference b/w you and me is that I’ve actually seen and read these IO jumbo mortgage documents; have you seen and read your neighbors and friends jumbo IO mortgage docs? Or did they just tell you that it’s fully amortizing.
“I know *many* people with jumbo loans. I do not know may people with I/O loans (indeed, I’m on my 3d amortizing jumbo mortgage)….You’re extrapolating from a self-selecting sample w/o adjusting for the obvious selection bias.”
“Bob.. One day if I come back to Chicago I’ll get you some of the stuff I smoke.”
You might want to reconsider if Rep Mark Kirk from the North Shore gets his new proposal onto law. Google it: draconion penalties based on potency.
I’m not arguing causation; I’m saying that all things being the same the IO loan buys a more expensive house for the same monthly payment as a 30 year fixed. That makes it inherently bad for everyone who wants to play by the 30 year fixed rules. Underwriting can fix or attempt to compensate for this inherent fault and that’s an issue in and of itself; this is a prima facie problem with IO mortages; the buyer isn’t required to make regular principal payments on his mortgage…
“transaction costs, too, so that is a very big “except.” Another $38,000 approx.”
$38k for transfer taxes and title insurance? C’mon G, the unavoidable costs are about $10k (transfer tax, title ins., water cert, escrow fees) at $615k.
I *clearly* excluded the (exorbitant) realtor fees (which **may** really cost them over $75k, b/c they likely paid that on the front end, too, as the flipper could have hit his IRR at a lower price if no realtor commission). It was supposed to be subtle trolling for someone to rant about the disconnect b/t cost of realtors and the actual service provided. Too subtle I guess.
Well I’ll keep y’all posted when Aimloan brings back no doc loans. They had them on their site almost until the financial system about collapsed. Thats some awesome business acumen!
These bankers are so smart and responsive to market conditions its almost real time. LOL
“However society has decided that the 30 year fixed is the basis, the benchmark for which all mortgages should arise.”
I remember 40 years being available until last summer and even read a blurb about 50 year mortgages that some SoCal banks were offering. I think it is plausible that our government may try to change the benchmark to allay the housing crisis.
Wouldn’t surprise me to see FNM & FRE endorsing 40 year loans pretty soon now that they are owned explicitly by the government. Makes sense for the government’s perverse agenda of stabilizing housing valuations at the expense of basically everything else.
“You too are extrapolating from a self-selecting sample, but the difference b/w you and me is that I’ve actually seen and read these IO jumbo mortgage documents;”
How many Jumbo Loan docs have you read for people who are as of today current on their payments, current on their other loan and CC payments and not contemplating bankruptcy and/or divorce?
I bet the number is one less than I have.
C’mon anon, you didn’t get that I meant the commission and transaction costs to be included in your “except?”
Too subtle, I guess.
“Wouldn’t surprise me to see FNM & FRE endorsing 40 year loans pretty soon”
It’s been discussed. No idea where it stands currently.
“Perpetual” mortgages were also offered, at least in the UK: “The mortgage, devised by Kent Reliance building society, allows parents to pay only the interest on their mortgage and defer the actual mortgage payments to their children. It could reduce the payments that parents pay by £150 per month.”
“the buyer isn’t required to make regular principal payments on his mortgage…”
Yes, and he pays a larger monthly interest pmt to compensate for that risk. It is exactly that non-pmt that reverse engineers the difference in the rates. The inefficiency is not in the loan. It is priced in there. The deficiency is in the underwriting. If you really do the math it is surprisingly more apples to apples than you think.
So G.. the fact I just received seeds for 20%+ THC plants would probably make me a lifer. Good thing I left!
” you didn’t get that I meant the commission and transaction costs to be included in your “except?””
Well, $38k is too little for Commission + Seller’s Closing Costs (I assume that the seller effectively pays the buyer’s piece of transfer tax, thru a lower sales price), so I wasn’t clear.
Yeah, they’ll end up behind renting on a cash basis at a $615k sale price even w/o realtor commission, but not by *that* much, and most people place some value on ownership, plus they did have a (unreasonably small) chance at appreciation, plus they kept their “rent-savings” out of the market.
Seriously, I would have thought them nuts to pay $630k for this in ’07, but given that they did, and assuming they can sell for $615, they could conunt themselves lucky BUT FOR the realtors’ take.
I cannot answer your question; I did quite a few real estate closings between 2003 and 2007; I haven’t done in a few years now that volume is down so significantly. There’s no way for me to know 2-5 years later whether the jumbo borrowers are current or now.
however, I do remember my impression was that the jumbo loan usually came in only variety: Interest only. Sometimes it was a neg am option arm which I guess isn’t really an interest only, so I guess I’m liar now.
“#anon (tfo) on June 19th, 2009 at 1:03 pm
“You too are extrapolating from a self-selecting sample, but the difference b/w you and me is that I’ve actually seen and read these IO jumbo mortgage documents;”
How many Jumbo Loan docs have you read for people who are as of today current on their payments, current on their other loan and CC payments and not contemplating bankruptcy and/or divorce?
I bet the number is one less than I have.”
Isn’t that like saying they could count themselves lucky BUT FOR buying in the first place?
“Isn’t that like saying they could count themselves lucky BUT FOR buying in the first place?”
Nah. It’s possible to avoid the realtor vig and it’s offensive to me that our government makes it harder to do so, rather than easier.
HD: You don’t seem to realize you keep saying that because Mr. and Mrs Jones drove drunk, I should lose my license too.
Now I gotta go stick my feet in water and play with electricity.
Best too all!
i rarely correct typs but that looks awful.. Best to all!
“You don’t seem to realize you keep saying that because Mr. and Mrs Jones drove drunk, I should lose my license too.”
And because all of the folks who need a lawyer for DUI defense drove drunk, most people drive drunk.
HD–There are NO STATS ANYWHERE providing any support for anything close to 50% I/O mortgages among Jumbos in in Illinois. I’ve looked. A lot. It may have been in that ballpark in Cali/NV/AZ/Fla, but nowhere else.
“Nah. It’s possible to avoid the realtor vig and it’s offensive to me that our government makes it harder to do so, rather than easier.”
I agree. The change will have to come from the inside (discount brokers.)
“I agree. The change will have to come from the inside (discount brokers.)”
So, any thoughts on what would happen if a number of MLS subscribers/NAR members got together, undercut pricing, got tossed out of the MLS & NAR and then sued? Because that’s what will happen.
And yes, I know about the MLS antitrust suit. See this article from a little over a year ago ( http://www.nytimes.com/2008/05/28/business/28realty.html ) which suggested that commissions would drop 25-50% as a result of teh settlement. Anyone seeing significant movement in that direction?
anon – You are giving the flippers a lot of credit. I don’t think most of them even know what an IRR is.
“as the flipper could have hit his IRR at a lower price if no realtor commission”
kp
You can also get Elementary and Preschool directory at your local CPL branch. It has all the info and statistics. Also talking with people who work for/with CPS helps.
As a home inspector who has done 400 or more inspections a year in the Chicago area for the last 10+ years I must give well deserved kudos to Belgravia. They seem to put out a well built product consistently. A block east of this location are some places with major masonry wall leakage issues. I’ve never seen that on a Belgravia built home.
It took me 12 months to sell my Chelsea townhome and I am the happiest guy on the planet to unload it at a loss. Too many sellers, too high taxes, expensive private schools and zero privacy. This unit I believe is a relo to the owners are making out just fine.